Correlation Between Microfriend and KTB Investment
Can any of the company-specific risk be diversified away by investing in both Microfriend and KTB Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Microfriend and KTB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and KTB Investment Securities, you can compare the effects of market volatilities on Microfriend and KTB Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Microfriend with a short position of KTB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and KTB Investment.
Diversification Opportunities for Microfriend and KTB Investment
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Microfriend and KTB is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and KTB Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTB Investment Securities and Microfriend is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Microfriend are associated (or correlated) with KTB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTB Investment Securities has no effect on the direction of Microfriend i.e., Microfriend and KTB Investment go up and down completely randomly.
Pair Corralation between Microfriend and KTB Investment
Assuming the 90 days trading horizon Microfriend is expected to generate 3.07 times less return on investment than KTB Investment. But when comparing it to its historical volatility, Microfriend is 1.93 times less risky than KTB Investment. It trades about 0.12 of its potential returns per unit of risk. KTB Investment Securities is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 256,000 in KTB Investment Securities on October 12, 2024 and sell it today you would earn a total of 44,500 from holding KTB Investment Securities or generate 17.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. KTB Investment Securities
Performance |
| Timeline |
| Microfriend |
| KTB Investment Securities |
Microfriend and KTB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and KTB Investment
The main advantage of trading using opposite Microfriend and KTB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, KTB Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KTB Investment will offset losses from the drop in KTB Investment's long position.| Microfriend vs. GS Retail Co | Microfriend vs. InnoTherapy | Microfriend vs. Aprogen Healthcare Games | Microfriend vs. Lotte Non Life Insurance |
| KTB Investment vs. AptaBio Therapeutics | KTB Investment vs. Daewoo SBI SPAC | KTB Investment vs. Dream Security co | KTB Investment vs. Microfriend |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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